Is your financial advice holding you back?

A look at the history of financial planning and software
April 21, 2024

Financial planning for retirement has been an established industry for at least 30 years at this point. The software for doing the planning has come such a long way.

Some of the earliest packages were run on DOS-based computers, if you remember what that was. In 1993, one of the first financial planning software packages was called Leonard 2000. At the time, financial planners often would say, “Let the software crunch the numbers first, and then we’ll decide what financial steps to take.” Made sense, but many people are still not doing much detailed software-based planning. The different results found by doing detailed planning versus an individual advisor postulating what you should do can be dramatic. That means the advice you’ve been given, if it’s not been done with proper planning software and a few scenarios run, could really be holding you back from some great retirement advice.

You’ll know you are getting planning and forecasting simply. If you have reports showing detailed cash flows and forecasts of what your finances might look like over the remainder of your life, you’re likely doing great planning. You also know by the questions an advisor asks you. They’ll be asking how much you might spend each year, how you are investing, calculating accurately how much tax you’ll pay annually and getting all kinds of other input from you. As a general litmus test, if you haven’t provided your financial planner with a somewhat detailed list of your annual expenses, you’re probably not doing much in the way of accurate, detailed planning. There really can’t be much in the way of solid planning done without knowing your annual expenses. How fast you spend your money each year in retirement is both critical and fundamental.

What might you find if you do detailed planning? A whole host of things, really. Spending more money earlier in your retirement might actually be OK, with well-thought-out strategies. What about Social Security claiming and optimizing your whole net worth instead of just your Social Security income? What else could there be? Roth conversions are often dismissed due to quick analysis with a wave of a hand or discussion of your tax bracket. You might find partial Roth conversions (even small ones, even after age 73) to be one of the most powerful steps an individual or couple might take. It can mean $700,000 or $800,000 more in after-tax dollars over time. You simply cannot figure this out without software-based, detailed planning. I’ll admit many planning strategies start out looking like they might not be such a good idea but turn out to be much more powerful and profitable than expected. It takes software and great planning to find out.

In this sort of planning, financial planners put numbers into the appropriate software, use a number of assumptions (conservative, moderate and aggressive scenarios) and see if different amounts of spending can work out, as well as Roth conversions, benefit of life insurance after the cost of paying the premiums – creating a whole host of problems to solve and solutions to develop. There are simply a lot of scenarios that the human brain can’t figure out even remotely accurately by thinking about it. I can tell you it is incredibly hard or even impossible for any individual to do in their head what software can do.

Bottom line, your advice might be holding you back. Get some detailed financial planning done. The latest software is so powerful, with tax-accurate calculations. Find a great financial planner and see how else you can benefit financially by exploring different strategies.

Eric W. Johnston, CFP, president of InFocus Financial Advisors Inc., is an investment advisor representative offering securities and advisory services through Cetera Advisors LLC, member FINRA/SIPC, a broker dealer and a registered investment adviser. Cetera is under separate ownership from any other named entity. For more information, call 410-677-4848 or email

Subscribe to the Daily Newsletter